Wednesday, December 08, 2004

So you think you're paying for an education . . .

Wrong. You're paying for the right to tell everyone you got an education, and then flash the fancy diploma in her face to prove it. Or at least that's one way to look at it. Most of what follows is taken from a lecture on game theory and signalling by Ben Polak, an Economics professor here at Yale. I'll just condense it a bit.

So, imagine a world where there are two types of workers, good workers and bad workers. The good workers are more productive than the bad workers. Employers have no obvious way of telling good workers and bad workers; there is no obvious "good worker trait." If employers know that a worker is good, they will offer her more money than a worker they know to be bad, since those workers will also produce more for their employers, and their services will be demanded more heavily than those of bad workers. In this world, there then must be some way for workers to signal employers that they are in fact the good ones.

In this scenario, then, the educational system provides a nifty way for workers to signal that they are in fact good workers. The example that Professor Polak offered was working to get an MBA. Good workers will have a higher payoff from achieving an MBA and getting paid as a good worker than a bad worker would have from achieving an MBA and getting paid as a good worker, since good workers actually face lower costs from doing all the extra MBA work because they're more productive. If you make getting an MBA hard enough, then getting one will be an effective signal that someone is a good worker—it's a signal that requires a cost to give, a much higher cost than a worker saying in an interviewer, "Oh yes, I'm a good worker." Furthermore, it's a cost that, since it's tied to one's ability to do work, actually varies according to whether or not a worker is good, so it's a very effective, reliable signal.

The same principle is easily extended to college degrees. And then to what grades you get while achieving said college degree. If you get better grades, you signal that you're a better worker, and you have the good grades to prove it. Getting good grades is probably not proof that you "learn" better than somebody else, but it may show that you're more reliable, good at meeting deadlines, goal-oriented—all things that an employer wants to see.

Obviously, problems with this explanation of why the educational system does what it does abound, specifically that learning becomes secondary to signalling. And there's also the fact that getting an education is not neccessarily due one's good worker-ness; after all, people getting better educations these days are as often signalling their whiteness, richness, suburbanness, and good parented-ness as they are their good worker-ness. Since I should be writing a final paper right now, I probably fall into that last category there.

1 Comments:

Blogger Swimmer said...

Your theory (or Prof. Polak's) assumes that your working life will be about displaying a particular set of traits demanded by traditional employers in traditional work settings. Defining a "good worker" as one who produces for her employer through her persistent, reliable effort and so lowers or limits costs her employer's costs is a one dimensional view of work.

What about creative work? What about working at painting, writing, sculpting or composing, for instance?

This work may not be done for an employer, may require irregular hours, loud music, lots of or little sleep, long walks, meditation and/or losing track of time.

Seems an education that doesn't prepare you to break as well as fit the mold isn't worth the $$$.

3:23 PM  

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